Following are two income statements for Alexis Co. for the year ended December 3
ID: 2337251 • Letter: F
Question
Following are two income statements for Alexis Co. for the year ended December 31. The left number column is prepared before any adjusting entries are recorded, and the right column includes the effects of adjusting entries. The company records cash receipts and payments related to unearned and prepaid items in balance sheet accounts ALEXIS cO. Income Statements For Year Ended December 31 Unadjusted Adjustments Adjusted Revenues Fees earned Commissions earned Total revenues $24,000 42,500 $66,500 $30,600 42,500 73,100 Expenses Depreciation expense-Computers Depreciation expense-Office furniture Salaries expense Insurance expense Rent expense Office supplies expense Advertising expense Utilities expense Total expenses 1,650 1,925 15,195 1,430 4,500 528 3,000 1.327 29,555 12, 500 4,500 3,000 1,250 21,250 $45,250 Net income $43,545 Analyze the statements and prepare the seven adjusting entries a through g that likely were recorded. Note: Entry for a refers to fees that have been earned but not yet billedExplanation / Answer
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Date Title Debit Credit 1 Accounts receivable ($30,600-$24,000) $ 6,600 Fees earned $ 6,600 (To record accrued income) 2 Depreciation expense - Computors $ 1,650 Accumulated Depreciation - Computors $ 1,650 (To record depreciation expense) 3 Depreciation expense - Office Furniture $ 1,650 Accumulated Depreciation - Office Furniture $ 1,650 (To record depreciation expense) 4 Salaries expense ($15,195-$12,500) $ 2,695 Salaries and wages payable $ 2,695 (To record salaries expenses) 5 Insurance expenses $ 1,430 Prepaid insurance $ 1,430 (To record expired insurance) 6 Office supplies expenses $ 528 Office supplies $ 528 (To record office supplies expenses) 7 Utilities expenses ($1,327-$1250) $ 77 Accounts payable $ 77 (To record utilities expenses accrued)